Why Must Profits Be Zero in Long-Run Competitive Equilibrium

question 154

Multiple Choice

Why must profits be zero in long-run competitive equilibrium?

• A)If profits are not zero, firms will enter or exit the industry.
• B)If profits are not zero, firms will produce higher-quality goods.
• C)If profits are not zero, marginal revenue will rise.
• D)If profits are not zero, marginal cost will rise.

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Definitions:

Shaded Area

This refers to the region that is visually differentiated by a darker shade on a graph or diagram, often used to highlight specific sections.

Z-scores

Z-scores are standardized scores indicating how many standard deviations an element is from the mean.

Standard Normal Distribution

A normal distribution with a mean of zero and a standard deviation of one, used in z-tests of statistical significance.

Less Than

A mathematical symbol (<) indicating that the value on the left is smaller than the value on the right.